There were no major reform in terms of innovation & research which came in from this budget. In terms of tax exemptions, with GST around roll out there were few changes in excise and custom tariff such as an increase in rates of excise duty on cigarettes and exemption of PoS and biometric devices from all types of customs duties. In addition to that there is a welcome change which is removal of the research and development cess (R&D cess), which was levied at 5% on import of technology. This removal of R&D cess will majorly give benefits to those companies which were unable to offset the same from service tax, as this cess was previously a part of service tax and used by TDB for funding the innovators.

Giving extra benefits to MSMEs, Mr. Jaitley announced reduction of direct tax for small companies with a turnover of up to Rs. 50 crore to 25% from 30%. He also said that this will give the benefit to about 67 lakh companies which fall under this category. By giving extra benefits to start ups Mr. Jaitley announced to extend the three-year tax exemption for startups in its first seven years from which was previously five years.

There was a reference to intangible assets and accounting standards to be adopted during revaluation of the intangible asset.

As there was a huge demand of removing the MAT from couple of years from the industry, but even allowing MAT credit to be carried forward from 10 years to 15 years will also get a clap & would be well appreciated by the industry.

Overall the budget did not give any major benefits to Indian innovation ecosystem. With the entire industry charging up for the tax reform by introduction of GST, from 1st July, this budget is a relief that there were no major indirect tax changes announced in the budget which can be an additional burden to the industry.